Sharma: Yes, CARE's micro-finance efforts are geared to ensure that poor women in India can access resources, services and markets equitably. We ran a seven-year micro-finance program funded by the UK Government in four Indian states, and benefited over 500,000 poor women.

We included micro-insurance as a financial service as a part of the program, resulting in provision of insurance coverage to more than 120,000 women. This provided us with valuable first-hand experience in the area of developing micro-finance products to suit the needs of the poor.

CARE also has valuable experience of implementing livelihoods restoration projects in post disaster scenarios. After the Gujarat Earthquake in 2001, we helped survivors recover from economic setbacks by helping them improve the design, production and marketing of their home-based craftwork. Survivors were also covered by insurance as a part of the program.

The project we are now launching with Allianz in tsunami-affected areas is critical for reducing the vulnerability of the affected populations and will help them withstand future shocks and disasters.

Sharma: Insurance is an indispensable financial service. Especially in the context of a disaster like the tsunami, we felt it was necessary to expand financial services for poorer people beyond granting loans and providing other financial services. We must reach out to the poor with insurance products specifically created for them.

Unless CARE ties up with large mainstream players and attracts their interest in the poor as potential clients, our efforts will be short-lived, ephemeral. We realize we need to expand our efforts in the area of micro-insurance, but we need to sharpen our understanding of the context to do it better.

We believe Allianz is the right partner to achieve this goal with us. They will be one of the few international entrants to this market and will be able to help understand this very special target group better. I see this project as the beginning of a long-term engagement.

Sharma: The goal is to ensure that the tsunami survivors can overcome the setback they faced as a result of the disaster and to secure the means by which they can insulate themselves against further shocks and insecurity through appropriate insurance coverage.

It is significant that a non-governmental organization and a private company are cooperating to achieve this goal through a public-private partnership model. The project demonstrates our commitment and will help expand the market for a truly useful product.

Sharma: CARE has a strong community presence in the tsunami-affected areas which affords us a deep understanding of the survivors' needs and capacities.

CARE's long term plans for survivors of the tsunami include microfinance as a key strategy. The tie-up with Allianz is very welcome as it will help CARE to expand microfinance services to include micro-insurance.

The value we bring to the project is the understanding of the context, the community, the clients and our existing links with the NGO partners. CARE can help Allianz to understand this under-served market better, help in developing appropriate products as well as facilitate with outreach issues for insurance products of Allianz. CARE can also help communities understand why they need micro-insurance, and how they will benefit from it.

Sharma: We started the micro-insurance project in response to the tsunami but we needed some preparatory time. Post-disaster scenarios are usually very volatile, and the environment needs to settle down before serious, disciplined programs such as micro-insurance can take hold. Thus, it wasn't possible to talk about or sell insurance products a year ago.

At the moment, things are still in a fledgling state – we have to organize the distribution and make the people we are addressing more familiar with the idea. However, we will soon scale up operations so that the most people can secure the benefits of the project.

Sharma: While there is a need for insurance, the big challenge is to convert this need into demand. If the products are customer-oriented, and the customers understand the critical value that insurance adds to the quality of life, they would definitely be willing to pay the premium.

We are happy to have a partner in Allianz, since it would be much more difficult for CARE to initiate the work without a mainstream insurance partner. Together, we can ensure that we develop the products that are attuned to the customers' needs. We are confident that the population will soon recognize the benefits.

Sharma: Even small amounts can be of substance in an emergency, to tide over their immediate hardship. The sums might not be large enough to fix all problems, but they do help. If the amount helps people get through a difficult time more smoothly, we would consider it worth the effort.

Sharma: The three years will give us time to see how the project develops and provide us with a better understanding of the micro-insurance market for the poor. It will also provide us with the opportunity to refine the insurance products. Bajaj Allianz can use this time to position itself and become familiar with the customers and their claims. It will be a good point in time to reflect and hopefully embark on a second round. I see this as a long-term partnership.

As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer, provided on the right.